*Nikkei edges up before U.S. bailout vote
*Volume light as investors wary before indicators, earnings
*Financials gain, trading houses pressured by oil's fall
(Adds stocks, details)
By Elaine Lies
TOKYO, Sept 29 (Reuters) - Japan's Nikkei stock average edged
up 0.5 percent on Monday, buoyed by Mitsubishi UFJ Financial
Group <8306.T> and other financials before a U.S. vote on a $700
billion fund to alleviate the financial crisis.
A fall in oil towards $106 a barrel weighed on trading houses
such as Mitsui & Co <8031.T>, while shippers extended last week's
losses after a key freight index tumbled on Friday.
U.S. lawmakers geared up to vote on the compromise
legislation, which would authorise the government to buy illiquid
assets from financial institutions and hold them until they could
be sold later.
Market players said investors were trapped between relief
that the bill looked likely to pass, with a House of
Representatives vote possible on Monday and one in the Senate
perhaps by Wednesday, and wariness as other long-term issues also
loomed.
"There's a sense of reassurance but also a sense of risk,
especially involving some of the large U.S. financials, and even
with this problem cleared up, the economic problems remain," said
Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.
"But the bailout deal has yet to pass, and of course there
are lots of questions about how it will be carried out. Japan's
been through a similar process and knows it takes a long time."
Investors were also starting to turn their eyes to crucial
economic indicators due out later this week.
That includes the Bank of Japan's quarterly "tankan" survey
of business sentiment on Wednesday and U.S. employment data on
Friday, while corporate earnings are also due in October.
"The market is already moving on to the next stage of things,
which is company earnings, now that October is near," said
Masayoshi Okamoto, head of dealing at Jujiya Securities.
"Even with the bailout, fundamental U.S. issues haven't been
cleared up. Attention will shift to domestic factors."
The benchmark Nikkei <> gained 54.49 points to
11,947.65, although it had earlier risen more than 1 percent. The
broader Topix <> was flat at 1,147.90.
FINANCIALS BUOYED, TRADERS PRESSURED
Financial shares fared relatively well, with Mitsubishi UFJ
climbing 2.5 percent to 954 yen and Mizuho Financial Group
<8411.T>, Japan's No. 2 bank, rising 0.9 percent to 472,000 yen,
although most had pared gains by midsession.
But oil slid as the U.S. dollar gained on optimism about the
bailout <CLc1>, and this pushed trading houses, which make the
bulk of the profits from their energy divisions, lower.
Mitsui & Co fell 6 percent to 1,338 yen, becoming one of the
top four drags on the Nikkei 225 by volume weight. It was
followed closely by Mitsubishi Corp <8058.T>, which was down 3.1
percent to 2,365 yen.
Some high-tech firms edged up as part of a rebound after
slipping last week, with Sony Corp <6758.T> gaining 2.6 percent
to 3,500 yen and Kyocera Corp <6971.T> rising 1.1 percent to
8,350 yen.
A smattering of defensive buying emerged as well in the face
of global economic uncertainty.
KDDI Corp <9433.T> gained 3 percent to 650,000 yen, while
drugmakers also performed strongly.
Astellas Pharma Inc <4503.T> rose 1.8 percent to 4,630 yen
and Chugai Pharmaceutical Co Ltd <4519.T> rose 5.6 percent to
1,790 yen. Soy sauce giant Kikkoman Corp <2801.T> climbed 4
percent to 1,512 yen.
Shippers extended last week's slide after the Baltic
Exchange's chief freight index for global raw materials trade
<.BADI> tumbled more than 10 percent on Friday.
Mitsui O.S.K Lines Ltd <9104.T> was down 4.7 percent to 902
yen and Kawasaki Kisan Kaisha <9107.T> slid 5.4 percent to 634
yen.
Trade was light, with 718 million shares changing hands,
compared with last week's morning average of 854 million.
Advancing shares beat declining ones by 982 to 590.
(Reporting by Elaine Lies; Editing by Edwina Gibbs)
